Monthly Archives: July 2013

Publicity material showing submission of the draft agriculture development policy to Kerala Chief Minister Oommen Chandy on July 11, 2013.

The draft Agriculture Development Policy of Kerala, drawn by a drafting committee chaired by K. Krishnankutty, tries to befool the farmers at least in respect of the highlighted policy initiatives.

The flagship proposals are what is called Actio apportum (translated into Malayalam as Avakasa Labhom) cess, to be routed to small and marginal farmers of paddy, and incentive to farm workers. This is described as a legal demand of right for sharing revenue or profit generated out of farm produce when it is traded.

However, this is nothing but a less-than-5 per cent subsidy for paddy production, totalling to about Rs. 400 crores annually. This amount could very well have been provided as a direct subsidy from government after collecting one per cent value added tax on rice. Still better, it should have been funded from revenues gathered elsewhere.

The policy, on the other hand, proposes collection of Re. 1 a kg as cess at the end point of sale of rice and payment to the farmers through Agriculture Department. The traders/millers would pass on this cess to the consumers or the farmers themselves by reducing the procurement price of paddy. So, this Actio apportum could just be a mirage.

The real right of the farmer is to get remunerative prices in the market place or through procurement by government. The policy has only usual bureaucratic proposals like “Price Fixation Authority” and minimum support price to address that. The experience so far is that procurement has not actually worked well because funding procurement has not been a priority for government.

The cess proposal would only serve to increase the size of bureaucracy especially in the Agriculture Department. There would have to be separate accounting and even a vigilance mechanism to detect evasion. A portion of what is collected as cess will vanish this way. The proposal also has a flaw in that the benefit is proposed to be limited to small and marginal farmers. Paddy production is to be sustained and it is not always the marginal farmer who can achieve that. So, all paddy cultivators would have to be provided with subsidies.

It also leads to a dichotomy in policy. The government had been lifting tax on rice in past budgets with the avowed objective of helping the poor. Now, it is thinking of a cess instead. Tax on branded rice, which is not consumed by the poor, would have been the best option to raise funds for subsidy.

The incentive proposed for agriculture workers is Rs. 6 a day. For an agriculture worker earning around Rs. 600 a day, this is a pittance. The Agriculture Department will have to maintain accounts and keep tab on the status of the worker and days of work done by him to make the payments. This is when the Department’s job is increasingly becoming disbursement of incentives and subsidies instead of providing extension services.

The real objective of the Latinisms and rhetoric about farmers’ rights is votes in the forthcoming elections. The politicians can claim that the present government has, for the first time, recognised the right of the farmers (called Actio apportum ) for a share in the profits of middlemen who are buying rice for Rs. 22 a kg and selling at exorbitant rates (up to Rs. 90 a kg.)!

Publicity material about the policy speaks of improving the status of farmers. However, actually the policy equates farmers to Class IV employees of government by proposing income guarantee “to the tune of that received by a Class Four Employees in State service”!

The policy proposes that farm lands should be reserved for agriculture, banning sale or use for no-agricultural purposes. Such a restrictive land use policy could be detrimental to the development of the State. Kerala could not remain an agrarian State for long (as the examples of developed societies show). So, some agriculture land would have to be used for industrial and infrastructure development. Anything that prevents establishment of agro-industries and production of value added products at the farm level would even be harmful.

So, implementation of this policy would have to fine-tuned, keeping overall development of the State in view. What actually is required is measures to check land being purchased and sold for short-term profit. Leaving land fallow should be discouraged by imposing higher tax on uncultivated land. Such a policy could be imposed by offering the low tax rates only for land certified to have a certain level of crop density.

Another proposal is to provide yield and sex assured animals to livestock farmers. Genomic section programmes are to be used to produce sexed semen that will ensure that only female of the species is born. It ought to be examined whether this would impact diversity which is crucial to prevent mass casualties from unanticipated diseases.